Nortel Networks Corp. of Canada, one of the world’s leading suppliers of fixed line phone network equipment, filed for protection from creditors Wednesday under Chapter 11 of the U.S. Bankruptcy Code. A pioneer in the development of network switches, routers, and fiber-optic technologies used by many of the world’s top telecommunications carriers, Nortel ranked as Canada’s largest company by value at the height of the global telecom market boom of the late 1990s and early 2000s. While recovering from an accounting scandal that resulted in a series of shareholder lawsuits and the firing of top executives that included former CEO Frank Dunn, Nortel was hit last year with a significant drop in demand for its products that was caused largely by the global economic downturn. Sources also note that Nortel sought bankruptcy protection one day prior to the company’s deadline for submitting a $107 million interest payment on bond debt. In total, Nortel owes more than $3.8 billion to bondholders and has approximately US $2 billion cash on hand to fund its operations. Nortel, which stressed that it would continue its operations “without interruption,” is also seeking bankruptcy protection in Canada and in Europe. Declaring that his company “must be put on a sound financial footing once and for all,” Nortel CEO Mike Zafirovski explained that the bankruptcy process is required to allow Nortel to “deal decisively with its cost and debt burden, to effectively restructure its operations, and to narrow its strategic focus in an effective and timely manner.”